Damages in Wildfire Litigation

• Publication year: 2020
• Author: Phillip Shaverdian and Robert Wright

Damages in Wildfire Litigation

Phillip Shaverdian and Robert Wright

Phillip Shaverdian is an appellate fellow at Horvitz & Levy LLP, where he works alongside the firm's attorneys on a variety of projects, including drafting briefs filed in both state and federal appellate courts. He received his B.A. from the University of California, Los Angeles in 2015 and his J.D. from the UCLA School of Law in 2019.

Robert H. Wright is one of Horvitz & Levy LLP's managing partners. He has been counsel of record in closely-watched appeals raising issues of statewide importance and has presented over 30 arguments before the state and federal appellate courts, including arguments before the United States Court of Appeals for the Ninth Circuit and each of the districts of the California Court of Appeal.

As wildfires have grown ever more destructive in California, wildfire litigation has grown ever more important. Central to this litigation are statutes that have dramatic impacts on the remedies available in these cases. California enacted these statutes in decades past to protect agrarian interests. The statutes preceded California's current challenges of urbanization, weather volatility, and climate change. As wildfires increasingly threaten California, the resulting litigation has challenged courts in applying these agrarian statutes to the California of today.

This article analyzes key appellate decisions impacting wildfire litigation, with focus on the construction of statutory remedies. The article analyzes several issues that have vexed the appellate courts in recent times, such as: to what extent can a plaintiff in wildfire litigation recover noneconomic damages for harm to property, a multiplier for fire damage to trees, and costs for fire suppression and investigation, and to what extent do these principles apply differently to public entities?

The Destructive Growth of California Wildfires

In just the past few years, California has suffered through the deadliest and most destructive wildfires in its history.¹ The size and area burned and the length of the fire season are growing dramatically.² In the final months of 2017, California experienced over 9,000 wildfires that burned 1.2 million acres of land and destroyed nearly 11,000 structures.³ The total economic loss of those fires is estimated at about $13 billion.⁴ Some of the principal contributing factors have been climate change, weather volatility, and California's urbanization.⁵ Indeed, some experts project a future even more dire, with wildfires raging more frequently and causing destruction up to six times as great.⁶ This increase in wildfires has sparked an increase in lawsuits across the state. And the increasing destruction of California's wildfires has upped the litigation stakes.

Recovery of Noneconomic Damages for Annoyance and Discomfort

In the middle of the last century, the California Supreme Court, in Kornoff v. Kingsburg Cotton Oil Co., recognized that "an occupant of land" may recover "damages for annoyance and discomfort" for the tort of nuisance or trespass.⁷ Recoverable damages include distress arising out of physical discomfort, irritation, or inconvenience, even if the trespass or nuisance caused no physical injury.⁸ Annoyance and discomfort damages are intended to compensate for the loss of "peaceful occupation and enjoyment of the property."⁹ Compensable injury thus depended on occupation of the land. But California courts have struggled in addressing the recoverability of such harms to plaintiffs asserting only a tenuous claim to having occupied the property.

In Kelly v. CB&I Constructors, Inc., the defendant was found to have negligently sparked a brush fire that spread and damaged a ranch owned by plaintiff Martin Kelly.¹⁰ The ranch contained three houses and various storage buildings.¹¹ Although Mr. Kelly had resided at the property for over two decades, he had moved out and rented all three houses to tenants prior to the 2002 fire that sparked the lawsuit.¹² Kelly continued to store tools and equipment onsite.¹³

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The court of appeal held that "a nonresident property owner who merely stores personal property on the premises is not entitled to recover annoyance and discomfort damages from a trespass."¹⁴ It was immaterial that Kelly retained some use of the ranch as storage. Annoyance and discomfort damages required "some personal effect that arises from the plaintiff's personal, physical presence on the premises."¹⁵ Thus, a plaintiff can recover annoyance and discomfort damages only if the plaintiff qualified as an occupant—one who is "in immediate possession of the property."¹⁶

Eight years later, in Hensley v. San Diego Gas & Electric Co., the court of appeal addressed similar issues. William and Linda Hensley sued San Diego Gas & Electric Company, alleging causes of action for negligence and trespass, after a wildfire burned their San Diego home and property.¹⁷ The Hensleys were not at home when their property burned. Instead, as the wildfire approached, they evacuated their home and drove to a nearby location where they watched the fire's path of destruction.¹⁸

The question on appeal was whether plaintiffs could recover annoyance and discomfort damages.¹⁹ The court of appeal answered that question in the affirmative. Mr. Hensley could recover damages for annoyance and discomfort "even though he was not physically present to see the fire ravage his house and land."²⁰ The court stated that annoyance and discomfort "naturally ensue when a fire damages a family home and destroys unique and valued property features."²¹

The Hensley court rejected defendant's argument that an owner or occupant must be personally or physically present when the invasion occurs to recover annoyance and discomfort damages: "Kelly stands only for the proposition that legal occupancy is required to recover damages for annoyance and discomfort in a trespass case, and that standard requires immediate and personal possession, as a resident or commercial tenant would have."²² In Hensley, plaintiffs both owned and resided on their property, and thus met the legal standard of occupancy necessary to claim annoyance and discomfort damages.²³

Under Hensley, for a plaintiff to recover annoyance and discomfort damages for a claim of nuisance or trespass by fire, the plaintiff, at the time of the fire, must be in immediate possession of the property but need not be physically present. In place of physical presence, Hensley requires only "immediate and personal possession."²⁴ Less clear is how courts will apply that standard to plaintiffs who, unlike the Hensleys, assert strained claims that they occupied property at the time of a loss, such as a plaintiff who owns a timeshare property or vacation property that is rented out for much of the year.²⁵

Multiplier for Damage to Trees

Interesting questions also arise when considering potential recovery for damages to trees caused by wildfires. California has two statutes authorizing damages multipliers for trespass causing injury to trees: California Civil Code section 3346 and California Code of Civil Procedure section 733.

Civil Code section 3346 provides that for "wrongful injuries to . . . trees . . . upon the land of another, . . . the measure of damages is three times such sum as would compensate for the actual detriment, except . . . where the trespass was casual or involuntary."²⁶ For casual or involuntary trespass, or when the defendant had probable cause to believe there was no trespass, a double multiplier applies.²⁷ Code of Civil Procedure section 733 provides that any person who cuts down a tree, carries off timber, "or otherwise injures any tree or timber on the land of another person, . . . or public grounds . . . , without lawful authority, is liable to the owner of such land . . . for treble the amount of damages which may be assessed therefor."²⁸

The California courts of appeal issued conflicting decisions on the question whether these multipliers applied to tree damage from wildfires. In Gould v. Madonna, the court of appeal construed the statutory scheme to demonstrate "a legislative intention that only actual damages be recoverable for injury caused by negligently set fires."²⁹ The court concluded that the legislative history showed "the Legislature ha[d] set up a statutory scheme concerning timber fires completely separate from the scheme to meet the situation of the cutting or other type of injury to timber."³⁰

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But in Kelly, the court of appeal affirmed a multiplier for fire damage to trees.³¹ The court of appeal...